After the recent decision in Kiobel v. Royal Dutch Petroleum, 06-4800-cv, 06-4876-cv (2d Cir. September 17, 2010) (.pdf), in which the Second Circuit Court of Appeals held that corporations cannot be sued under the Alien Tort Statute (“ATS”) for violations of customary international law, it is worth reviewing statements made by courts in other circuits with regard to corporate liability under the ATS.

As is reflected in the summaries below, many federal courts have not yet directly addressed the question of corporate liability under the ATS and others have merely made observations without precedential value. Some courts have assumed, without comment, that corporations and other private actors are proper defendants in ATS cases. Other courts have found that corporate defendants are only proper defendants when the plaintiffs can show that defendants were de facto state actors.

For background, an overview of the 12 regional circuits within the U.S. federal court system can be found here.

First Circuit — The First Circuit Court of Appeals has not directly addressed the question of corporate liability under the ATS.

Second Circuit — Kiobel’s holding that corporations cannot be held liable under the ATS is now law in the Second Circuit. This decision may be reviewed en banc, or by the Supreme Court.

Prior to Kiobel, the Second Circuit assumed “without deciding, that corporations…may be held liable for the violations of customary international law” in Presbyterian Church of Sudan v. Talisman Energy, Inc, 582 F.3d 244 (2nd Cir. 2009). In Khulumani v. Barclays Nat. Bank Ltd., 504 F.3d 254 (2d Cir. 2007) (Katzmann, J., concurring), the Second Circuit observed, although the issue was not raised on appeal, that “[w]e have repeatedly treated the issue of whether corporations may be held liable…as indistinguishable from the question of whether private individuals may be.” In Abdullahi v. Pfizer, Inc., 562 F.3d 163 (2d Cir. 2009), the Second Circuit allowed certain claims to proceed in an ATS suit and did not directly address the question of whether corporations were proper defendants.

Third Circuit — The Third Circuit Court of Appeals has not directly addressed the question of corporate liability under the ATS. The Third Circuit upheld the lower court’s dismissal of Hereros ex rel. Riruako v. Deutsche Afrika-Linien Gmblt & Co., 232 Fed.Appx. 90 (3d. Cir. 2007), a case involving claims under the ATS, on other grounds.

In a lower court decision, the District Court in Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424 (D.N.J. 1999), stated that “[n]o logical reason exists for allowing private individuals and corporations to escape liability for universally condemned violations of international law” and noted that it was therefore inclined to find that “private entities using slave labor are liable under the law of nations.” The District Court, however, did not decide whether corporate defendants were liable as private actors after finding that the defendants were de facto state actors.

Fourth Circuit — The Fourth Circuit Court of Appeals has not directly addressed the question of corporate liability under the ATS.

Lower court decisions in the Fourth Circuit contain conflicting statements about corporate liability under the ATS. In Al-Quraishi v. Nakhla, 2010 WL 3001986 (D. Md. 2010), the District Court found that corporations are properly subject to the law of nations, stating that there is “no basis for differentiating between private individuals and corporations in this respect since ‘[a] private corporation is a juridical person and has no per se immunity under U.S. domestic or international law.’” (citing Presbyterian Church of Sudan v. Talisman Energy, Inc., 244 F.Supp.2d 289, 319 (S.D.N.Y.2003)). Similarly, In In re XE Servs. Alien Tort Litig., 665 F. Supp. 2d 569 (E.D. Va. 2009), the District Court stated that “[n]othing in the ATS or Sosa may plausibly be read to distinguish between private individuals and corporations; indeed, Sosa simply refers to both individuals and entities as ‘private actors.’” In Al Shimari v. CACI Premier Technology, Inc., 657 F. Supp. 2d 700 (E.D. Va. 2009), however, the District Court granted defendants’ motion to dismiss in part because the Court was “unconvinced that ATS jurisdiction reaches private defendants such as CACI.”

Fifth Circuit — The Fifth Circuit Court of Appeals has not directly addressed the question of corporate liability under the ATS. In Carmichael v. United Technologies Corp., 835 F.2d 109 (5th Cir. 1988), the Fifth Circuit assumed, without deciding, that the ATS “does confer subject matter jurisdiction over private parties who conspire in, or aid and abet, official acts of torture by one nation against the citizens of another nation.”

More than ten years later, in Beanal v. Freeport-McMoRan, Inc., 969 F. Supp. 362 (E.D. La. 1997), the District Court held that “[s]tate action is required to state a claim for violation of the international law of human rights” and therefore dismissed claims brought against Freeport-McMoRan for failure to state a claim. In Beanal v. Freeport-McMoRan, Inc., 197 F.3d 161 (5th Cir. 1999), the Fifth Circuit upheld the lower court’s dismissal of plaintiff’s claims on other grounds and did not address the question of “whether state action is required to sustain an action for individual human rights violation under the ATS.”

Sixth Circuit — The Sixth Circuit Court of Appeals has not directly addressed the question of corporate liability under the ATS.

Seventh Circuit­ — The Seventh Circuit Court of Appeals has not directly addressed the question of corporate liability under the ATS. In Roe I v. Bridgestone Corp., 492 F. Supp. 2d 988 (S.D. Ind. 2007), the District Court declined to dismiss claims alleging that a corporate defendant was “encouraging or even requiring” child labor and stated that “in a sufficiently extreme case…the court believes that Sosa leaves the ATS door open.” The District Court did not specifically address the question of corporate liability.

Eight Circuit — The Eighth Circuit Court of Appeals has not directly addressed the question of corporate liability under the ATS.

Ninth Circuit— In Doe I. v. Unocal, 395 F.3d 932 (9th Cir. 2002), the Court found that "private party", such as the named corporate defendant, may be subject to liability under the ATS for aiding and abetting certain violations of customary international law without a showing of state action. In Sarei v. Rio Tinto, Plc., 487 F.3d 1193 (9th Cir. 2007), the Ninth Circuit upheld certain claims against a corporate defendant without directly addressing the question of corporate liability.

In a recent decision by the District Court for the Central District of California, however, the Court found that "corporations cannot be held directly liable under the Alien Tort Statute for violating international law" noting that "existing cases have not adequately identified any international law norms governing corporations." Doe v. Nestle, cv-05-5133 (C.D. Cal. September 8, 2010). This decision was cited by the Second Circuit in Kiobel.

Earlier decisions in the lower courts upheld corporate liability under the ATS without specific discussion. In Bowoto v. Chevron Corp., 557 F. Supp. 2d 1080 (N.D. Cal. 2008), the District Court denied a corporate defendant’s motion for summary judgment in an ATS case, without directly addressing the question of corporate liability. In an earlier decision, Bowoto v. Chevron, 2006 WL 2455752 (N.D. Cal. 2006), the District Court observed that “[t]he dividing line for international law has traditionally fallen between states and private actors. Once this line has been crossed and an international norm has become sufficiently well established to reach private actors, there is very little reason to differentiate between corporations and individuals.” Corporate liability was also upheld, without discussion, in Mujica v. Occidental Petroleum Corp., 381 F. Supp. 2d 1164 (C.D. Cal. 2005).

Tenth Circuit — The Tenth Circuit Court of Appeals has not directly addressed the question of corporate liability under the ATS.

Eleventh Circuit — In Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252 (11th Cir. 2009), the Eleventh Circuit stated that “we have…recognized corporate defendants are subject to liability under the ATS and may be liable for violations of the law of nations." In Romero v. DrummondCo., Inc., 552 F.3d 1303 (11th Cir. 2008), the Eleventh Circuit stated that "state actors are the main objects of the law of nations, but individuals may be liable, under the law of nations, for some conduct, such as war crimes, regardless of whether they acted under color of law of a foreign nation" and that "[t]he text of the Alien Tort Statute provides no express exception for corporations…and the law of this Circuit is that this statute grants jurisdiction from complaints of torture against corporate defendants." In Romero, the Eleventh Circuit Court cited to Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.3d 1242 (11th Cir. 2005), although in that case the Eleventh Circuit relied upon a finding of state action and did not directly address the question of whether corporate defendants could be properly sued as private actors.

D.C. Circuit — The D.C. Circuit Court of Appeals has not directly addressed the question of corporate liability under the ATS.

Decisions in the D.C. lower courts have been mixed in terms of the treatment of private actors as proper defendants under the ATS. In Arias v. Dyncorp, 517 F. Supp. 2d 221 (D.D.C. 2007), the District Court stated that “[i]t is clear that the [ATS] may be used against corporations acting under ‘color of state law,’ or for a handful of private acts, such as piracy and slave trading.” In Estate of Manook v. Research Triangle Institute, International and Unity Resources Group, L.L.C., 693 F.Supp.2d 4 (D.D.C. 2010), however, the District Court, cited Arias’s language regarding liability for certain private acts but then stated that “courts have limited a corporation’s liability exposure under the ATS for violations of the law of nations to apply only to state actors[.].” The District Court cited to Ibrahim v. Titan Corp., 391 F.Supp.2d 10 (D.D.C. 2005), in which the District Court rejected liability for private, non-state actors, stating that “the question is whether the law of nations applies to private actors like the defendants in the present case. The Supreme Court has not answered that question… but in the D.C. Circuit the answer is no.” (citing Tel-Oren v. Libyan Arab Republic, 726 F.2d 774 (D.C. Cir. 1984).)

Finally, in Doe v. Exxon Mobil Corp., 393 F.Supp.2d 20 (D.D.C. 2005), the District Court went even further and rejected plaintiffs’ ATS claims despite arguments that defendants were de facto state actors. The District Court stated that "a few courts have held individuals liable for Alien Tort Statute violations when they acted under color of law…Reasoning in these cases is unpersuasive, however." Notably, the District Court also stated that the Supreme Court has "suggested that only states, and not corporations or individuals, may be liable for international law violations." (citing Sosa v. Alvarez-Machain, 542 U.S. 692, 733 n. 20 (2004).)

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Gwendolyn is co-chair of the firm’s International Business practice group and head of its Trade Sanctions and Export Controls practice. She is also a member of the firm’s Corporate Social Responsibility group...More